The world that has come to be dominated by online marketplaces in which hundreds of billions of personal and business transactions take place over the internet daily. In our modern day “sharing economy,” peer-to-peer based sharing of access to goods and services have become prevalent. These types of transactions take place alongside others that are business-to-consumer, rather than peer-to-peer.
It has always been difficult to ascertain the identity of a particular person (e.g., a human or online company). Unless one has previously met the person in circumstances that assures that person's identity or the person is vouched for by another trusted individual, there is little assurance that a given person is really who she says she is. This problem is especially confounding with respect to peer-to-peer transactions between individuals in which the pool of potential buyers or sellers is extremely large.
Society has dealt with this problem over the years by providing the person whose identity may be questioned identifying papers, a badge, identification card, or even a uniform. All of these means may be easily compromised, however.
Recent technology has offered other solutions to assure identity, such as retinal scans, DNA analysis, fingerprinting, or facial recognition software. These systems work but are often impractical when dealing with other parties through the Internet and, more often than not, across long distances.
Another similar solution uses a “challenge” question scheme to determine whether a person logging onto, for example, a remote banking system should be trusted. In a prior initialization session with a bank, for example, the person initially creates a set of challenge questions. When the person later tries to log on to the bank system from a remote and unknown computer, before they are passed through to the system, the untrusted person is requested to answer these challenge questions and enter a password. It remains relatively easy, however, for some to defeat these security measures because it is merely based on information, which may be disclosed to, stolen by others or obtained from public sources or through some combination thereof. To combat this problem challenge questions have become more and more difficult to answer. People cannot always remember distant facts and sometimes those trying to infiltrate are able to answer these questions with ease.
Additionally, the verification service is set up by the bank itself and cannot be used by other entities to establish trust, nor can this information be adapted for use of additional questions such as: “Will this person repay a loan?” or “Is this person qualified to be a plumber?
For the foregoing reasons, a solution that can easily and reliably provide a satisfactory level of assurance is still needed.